Market Review For January 24, 2014

Major U.S. indices were mixed this week. Broad market indices like the S&P 500 and Dow Jones moved lower this week, while technology and small-cap stocks bucked the trend. Leading indicators in the U.S. rose in December but a selloff in emerging market assets led to selling around the world. Unemployment also remains a persistent problem in the U.S.

International markets moved sharply lower this week. Japan's Nikkei 225 fell 2.18%; Britain's FTSE 100 fell 2.42%; and, Germany's DAX 30 fell 3.6% this week. In Asia, emerging economies will contribute less to global growth than expected. In Europe, growth expanded at its fastest clip in two years, igniting hopes that the region could post a strong recovery.

The SPDR S&P 500 (ARCA:SPY) ETF fell 0.08% this week, as of Friday afternoon. After falling below trend line support, the index fell near its 50-day moving average at 180.94. Traders should watch for a rebound from the 50-day moving average or a move lower to S1 support or trend line support at around 177.00. Looking at technical indicators, the RSI appears oversold at 41.55 and the MACD remains in a bearish downtrend, signaling more potential downside ahead.

The SPDR Dow Jones Industrial Average (ARCA:DIA) ETF fell 0.26% this week, as of Friday afternoon. After falling below its pivot point and lower trend line, the index reached its S1 support at 159.47 just below its 50-day moving average. Traders should watch for a rebound to the pivot point or upper trend line or a move lower to S1 support at 153.61. Looking at technical indicators, the RSI remains oversold at 38.44 and the MACD remains in a bearish downtrend.

The PowerShares QQQ (NASDAQ:QQQ) ETF rose 1.24% this week, as of Friday afternoon. After nearly reaching its R1 resistance at 89.35, the index moved towards its lower trend line at around 87.00 and above its pivot point at 86.57. Traders should watch for a rebound from the lower trend line towards the middle of its price channel or a move lower to S1 support at 85.18. Looking at technical indicators, the RSI and MACD are neutral.

The iShares Russell 2000 (NYSE:IWM) ETF rose 0.84% this week, as of Friday afternoon. After reaching its upper trend line, the index fell to its lower trend line and pivot point at 113.41. Traders should watch for a rebound from this level towards the middle of the channel or a move lower to S1 support at 110.85. Looking at technical indicators, both the RSI and the MACD remain at relatively neutral levels.

Summary

The major U.S. indices were mixed but moved lower during the latter portion of the week. With RSI's being in oversold territory, traders should watch for a modest rebound next week, although MACD indicates that a long-term downtrend remains. Next week, traders will be watching a number of economic events including home sales on the 27th, FOMC minutes on the 29th, GDP on the 30th, and personal incomes on the 31st.

Disclosure - At the time of writing, the author did not own shares of any company mentioned in this article.